Alibaba has lowered the barriers of entry for merchants and sellers on its online marketplaces, Tmall and Taobao. Reduced costs and comprehensive support are some of the technological improvements and upgrades that should allow the company to expand its portfolio of sophisticated services.
Similarly, Alibaba (BABA) plans to invest more in merchants’ training to improve their operational efficiency. The e-commerce giant also intends to spend billions of RMB to support merchants in the coming years.
Some of the new changes that merchants stand to enjoy include reduced time to open new stores. It will take less than five minutes, and one click on the Taobao mobile app to get everything up and running. Tmall has also simplified the verification process for businesses looking to launch stores on the platform.
Taobao has waived the deposit fees for new merchants. Existing sellers will receive a refund for deposits initially made. Tmall merchants with high credit scores can now reallocate 50% of their deposit for operational use. Tmall and Taobao have also started offering one-on-one customer support service to merchants.
The new measures designed to enhance operational efficiency and reduce entry barriers come just days after the Chinese anti-trust regulator hit the tech giant with a $2.8 billion fine. In a research note to investors, Robert W. Baird’s analyst Colin Sebastian downplayed the fine’s potential impact.
“We view the recent fines imposed on Alibaba by Chinese anti-trust regulators as somewhat more benign than feared, and we expect few lasting headwinds to Alibaba’s strong market position,” wrote Sebastian in a research note.
Alibaba shares are up 2.6% year-to-date after a 9.6% gain in 2020. (See Alibaba stock analysis on TipRanks).
Sebastian maintains an Overweight rating on Alibaba with a $285 price target implying 19.7% upside potential to current levels.
Alibaba commands a Strong Buy consensus rating on Wall Street based on 22 Buys and 1 Hold. The average analyst price target of $311.85 implies 30.65% upside potential to current levels.
BABA scores a “Perfect 10” on TipRanks’ Smart Score system, signaling it could outperform the overall market.
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